Challenge 13: smart energy demand and renewable supply

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Mark Diesendorf does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

The stated purpose of the Millennium Project, which has inspired State of the Future 2012, is “to improve humanity’s prospects for building a better future”. I interpret “better future” to mean an ecologically sustainable and socially just future. To achieve this, we must challenge the three drivers of unsustainable development on a finite planet - growth in population, growth in consumption per person, and inappropriate technology — and present a vision of a sustainable future.

Question 13 was posed by the Millennium Project in a global context. However, when applied to Australia and other rich countries, the assumption that energy demand should continue to grow must be challenged at the outset.

There is huge potential for increasing the efficiency of energy use through technological improvements (known as “energy efficiency”) and reducing the demand for energy services by fostering behavioural changes (known as “energy conservation”). These are the cheapest and fastest ways of cutting unnecessary energy demand. The key foci are buildings (including the appliances and equipment they contain) and industry.

Wising up electricity use: a smart meter.AAP/David Crosling

In the near future, a new tool will become widely available for monitoring and reducing electricity demand: the smart meter as a component of the “smart grid”. A smart meter can monitor a consumer’s electricity demand continuously and can display that demand in real time to both the consumer and the distant electricity utility. In a system where electricity price varies by time of day, a very smart meter could be programmed by the consumer to switch off certain circuits (e.g., air conditioning) temporarily when electricity prices reach a certain level. When there is a high peak in demand or a failure in part of the supply system, the utility could also remotely and temporarily turn off a customer or one or more of their appliances via the smart meter or other devices.

Energy supply may be classified into forms that are used as electricity, heating and transportation. At present about 80% of Australia’s electricity is generated by the combustion of coal, the majority of heat comes from burning gas and almost all transport is fuelled on oil (most of which imported at a huge cost). This combination, but especially the heavy coal use, has given Australia the unenviable record of the highest per capita greenhouse-gas emissions in the developed world.

Australia has huge renewable energy, especially solar, wind and hot rock geothermal. Even if we are limited initially to technologies that are currently commercially available, we could make the transition to a predominantly renewable energy system within two to three decades, if we could mobilise the political will. Scenarios for 80-100% renewable energy have been developed by government agencies, academics, and NGOs for the whole world, the European Union, Denmark, Germany, the Netherlands, United Kingdom, USA, Japan, New Zealand, Ireland and Australia. Some of these studies address the whole energy sector, while others focus on electricity. Denmark has a target of 100% renewable energy by 2050. This includes reaching 50% of electricity from wind by 2020, phasing out coal by 2030 and reaching 100% renewable electricity and heat by 2035.

In Australia, two groups have published computer simulations showing hour-by-hour how observed electricity demand in a given year could have been supplied entirely by renewable sources with the same reliability as the existing polluting system. The first study was a single scenario spanning 2008-2009 commissioned by the NGO Beyond Zero Emissions (BZE). A much more detailed examination - based on scores of hourly simulations of 2010 - was published in 2012 in the peer-reviewed journal Energy Policy (vol. 45, pp.606-613) by Ben Elliston, Mark Diesendorf and Iain MacGill from UNSW. In the UNSW scenarios, we removed several assumptions making the BZE simulation unnecessarily expensive while maintaining reliability at the current standard. In our model, electricity is generated predominantly from concentrated solar thermal (CST) power with thermal storage, solar photovoltaics (PV) and wind, with the flexible sources being biofuelled gas turbines, hydro, and smart demand management balancing supply and demand - in effect smoothing the fluctuations in wind and solar PV.

Both the BZE and UNSW studies refute the claims by vested interests and their unwitting proponents that renewable energy cannot replace base-load (24-hour) coal-fired power. BZE interprets its results by saying that CST with thermal storage is base-load. We interpret the simulation results differently, concluding that although CST can perform in a similar manner to base-load in summer, it cannot in winter. However, that doesn’t matter. In a predominantly renewable energy supply mix, the concept of “base-load power station” is redundant. The important result is that renewable energy mixes can give the same reliability of the whole generating system in meeting demand, as the existing polluting fossil-fuelled system. Similar results and conclusions were obtained for the USA by David Mills in a paper presented at the Solar 2011 conference.

It should be emphasised that neither the modelling of BZE nor UNSW establishes a timescale for the transition to 100% renewable electricity. However, the main body of the BZE report claims heroically that the transition could be made in a decade. That claim is actually an assumption based on the observations that Australia could supply the raw materials for manufacturing the systems and that solar and wind technologies are suitable for rapid manufacture. While these observations are valid, they don’t justify the notion of a very short timescale for the transition.

We must consider the time needed to undertake a huge training program for engineers (especially electric power engineers) and other essential professionals, the challenges of reversing the industry policies of many previous Australian governments that have decimated most of our manufacturing capacity, and the complex institutional reforms needed, such as changing the rules of the National Electricity Market. An entirely different kind of research project is needed to investigate possible transition timescales.

In most 100% renewable electricity scenarios, electricity is given a wider role than at present. It is envisaged that electric vehicles would replace most motor vehicles for urban use. Public transport, mostly electric, would be greatly expanded and improved, as would facilities for cycling and walking. A greater proportion of high temperature industrial heat would be supplied by renewable electricity and possibly from CST heat, which is not yet commercially available. Most low-temperature heating and cooling would be supplied by solar thermal energy and by geothermal heat pumps.

The principal barrier to the transition to a predominantly renewable energy system is the failure of governments of both major parties, both federal and state, to implement effective policies. The carbon price to take effect on 1 July will alert prospective investors in new dirty coal-fired power station that they would be taking a risk; however, its initial value of $23 per tonne of CO2 is too low to drive the necessary transition. It would be better to have a carbon tax that increases steadily up to at least $100 per tonne by 2030.

Until such a level is reached, a stronger Mandatory Renewable Energy Target is needed, at least 30% of demand in 2020 and at least 60% by 2030. Large-scale solar needs feed-in tariffs (FiTs), gradually decreasing to zero as the technologies mature. Small-scale solar, wind and hydro also need FiTs, initially equal to the retail prices of grid electricity and then decreasing steadily. Time-of-day pricing of electricity for all consumers would give a big boost to solar PV on residential and commercial buildings and would enable their FiTs to be phased out within a few years.

Other required policies include mandatory energy efficiency standards for all residential and commercial buildings and all energy-using appliances and equipment. Essential infrastructure is new transmission lines and railways. About $10 billion per year could be freed up to assist the transition by removing existing subsidies to the production and use of fossil fuels.

The job creation potential in energy auditing and in manufacturing and installing renewable energy and energy efficiency technologies is substantial. The current subsidies to the production of petrol-guzzling cars should be shifted to the sustainable energy technologies and to retraining auto-workers to build renewable energy hardware. Australia could manufacture components that are too large to import at low cost, such as wind turbine blades and mirrors for solar power stations.

We must finally discard the notion that Australia’s role in the global economy is restricted to that of a quarry for fossil fuels and minerals. Australia could be a manufacturer of sustainable energy systems and, in the long term, a major exporter of solar hydrogen to countries that are less blessed with renewable energy resources.